Disney responds to activist investor Dan Loeb’s suggestions

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In response to activist investor Dan Loeb’s suggestions, Walt Disney($NYSE:DIS) has announced that it will take some of his suggestions into consideration. This includes Loeb’s call for some fresh blood on the company’s board of directors. Earlier Monday, Loeb announced he’d taken a significant new stake in the company in recent weeks, and issued a multi-point plan of ideas, including buying Comcast out of its remaining stake in Hulu; giving more thought to spinning off ESPN; launching a cost-cutting program, including disposing of underperforming assets; suspending the dividend indefinitely in favor of debt repayment, buybacks and organic investments; and refreshing the board to address “gaps in talent and experience.” Disney has responded by saying that the company’s board of directors is experienced and has benefited from continuous refreshment. The board has an average tenure of four years. Disney also announced that it will take some of Loeb’s other suggestions into consideration, including buying Comcast out of its remaining stake in Hulu and giving more thought to spinning off ESPN. It is unclear how this will affect Walt Disney’s market and earnings in the long term.

Market Reaction

Disney responded to activist investor Dan Loeb’s suggestions on Monday, with the stock opening at $121.0 and closing at $124.3, up by 2.2% from prior closing price of 121.6. The news was mostly mixed, with some investors praising Disney for its handling of the situation and others feeling that the company could have done more to address Loeb’s concerns. Overall, it appears that investors are still confident in Disney’s ability to continue creating value for shareholders.

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Summary

The company’s stock price rose 2.2% the following day. Disney has long been a target of activist investors, and Loeb is no exception. In his letter, Loeb outlined several areas where he believes Disney could improve its business, including increasing its focus on its core businesses, reducing costs, and becoming more shareholder-friendly. Disney has responded to Loeb’s suggestions, saying that it is already taking steps to improve its business. The company has promised to increase its focus on its core businesses, reduce costs, and become more shareholder-friendly. While Disney’s stock price rose following the release of the letter, it remains to be seen if the company can truly deliver on Loeb’s demands.